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First Trust Specialty Finance and Financial Opportunities Fund (FGB)
Investment Objective/Strategy - The First Trust Specialty Finance and Financial Opportunities Fund is a non-diversified, closed-end management investment company. The Fund's primary investment objective is to seek a high level of current income. The Fund seeks an attractive total return as a secondary objective. The Fund will seek to achieve its investment objectives by investing at least 80% of its Managed Assets in a portfolio of securities of specialty finance and other financial companies that the Fund's sub-advisor believes offer attractive opportunities for income and capital appreciation.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeFinance
Investment AdvisorFirst Trust Advisors L.P.
Portfolio Manager/Sub-AdvisorConfluence Investment Management LLC
Investor Servicing AgentBNY Mellon Investment Servicing (US) Inc.
Fiscal Year-End11/30
Inception Price$20.00
Inception NAV$19.10
Current Fund Data (as of 8/29/2014)
Closing NAV1$8.22
Closing Share Price2$8.85
Premium to NAV7.66%
Total Managed Assets$142,438,129
Common Shares Outstanding14,290,840
Dividend FrequencyQuarterly
Dividend Per Share Amt3$0.1725
Distribution Rate47.80%
Daily Volume137,565
Average 30-Day Daily Volume82,397
Closing Share Price 52-Week High/Low$8.85 / $7.54
Closing NAV 52-Week High/Low$8.75 / $7.81
Expense Ratios (as of 5/31/2014)
Annual ExpensesPercent of
Net Assets
Percent of
Management Fees1.22%1.00%
Other Expenses
Total Operating Expenses1.52%1.26%
Leverage Costs0.18%0.15%
Total Annual Expenses1.70%1.41%
Leverage costs include interest, fees and any upfront/offering costs associated with borrowings by the Fund.
Top 10 Holdings (as of 5/31/2014)7
Holding Percent
Ares Capital Corp. 9.06%
Golub Capital BDC, Inc. 6.28%
PennantPark Investment Corp. 5.23%
Hercules Technology Growth Capital 5.09%
TCP Capital Corp. 4.92%
THL Credit, Inc. 4.88%
Medley Capital Corp. 4.87%
New Mountain Finance Corp. 4.73%
CYS Investments, Inc. 4.64%
Solar Capital Ltd. 4.37%
Asset Type Breakdown (as of 5/31/2014)7
  Asset Percent
Common Stocks - Business Development Companies 83.49%
Common Stocks 14.15%
Master Limited Partnership 2.36%
Share Price and NAV History (Since Inception)
Past performance is not indicative of future results.
% Premium/Discount (Since Inception)
Cumulative Total Returns (as of 7/31/2014)5
Period Share Price NAV
3 Months 10.70% 2.22%
1 Year 6.88% 4.53%
3 Years 56.34% 41.69%
5 Years 155.41% 124.32%
Year to Date 9.17% -0.93%
Inception to Date -12.62% -10.73%
Calendar Year Returns (as of 12/31/2012)5
Period Share Price NAV
2008 -61.47% -57.37%
2009 79.02% 51.07%
2010 38.95% 36.72%
2011 -9.95% -5.42%
2012 34.84% 25.74%
Average Annual Returns (as of 7/31/2014)5
Period Share Price NAV
3 Years 16.06% 12.32%
5 Years 20.63% 17.54%
Inception to Date -1.86% -1.57%
Leverage Information (as of 8/29/2014)6
Total Net Assets with Leverage$142,438,129
Amount Attributable to Common Shares$117,438,129
Amount Attributable to Preferred Shares$0
Amount Attributable to Other Borrowings$25,000,000
Leverage (% of Total Net Assets)17.55%
Industry Breakdown (as of 5/31/2014)7
  Industry Percent
Capital Markets 86.44%
Real Estate Investment Trusts (REITs) 10.79%
Diversified Financial Services 2.77%
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's common shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 Distribution rates are calculated by annualizing the most recent distribution paid or declared through today's date and then dividing by the most recent market price. The distribution consists of the sum of net investment income, net realized short-term capital gains, net realized long-term capital gains, and return of capital. Distribution rates may vary. Any distribution adjustment will not be reflected until after the declaration date for the next distribution. See the fund's 19a-1 Notices, if any, located under the "News & Literature" section of the website for estimates of distribution sources. Final determination of the source and tax status of all distributions paid in the current year will be made after year-end.
5 Total return is the combination of reinvested dividend income and reinvested capital gains distributions, at prices obtained by the Dividend Reinvestment Plan, if any, and changes in the NAV and Share Price. The NAV total return takes into account the fund's total annual expenses and does not reflect sales load. Past performance is not indicative of future results.
6 Leverage is a technique where a closed-end fund's manager borrows assets at one rate and invests the proceeds from the borrowed assets at another rate, seeking to increase yield and total return. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.
7 Market value information used in calculating the percentages is based upon trade date plus one recording of transactions, which can differ from regulatory financial reports (Forms N-CSR and N-Q) that are based on trade date recording of security transactions. Holdings are subject to change.

Risk Considerations

The Fund, as with any other closed-end fund, may under perform the stock market. The Fund is subject to various risks, including: Investment and Market Risk, Management Risk, Sub-Advisor Risk, Value Investing Risk, Income Risk, Specialty Finance and Other Financial Companies Risks, Common Stock Risk, Preferred Stock and Trust Preferred Securities Risk, Convertible Securities Risk, Fixed-Income Securities Risk, Lower Grade and Distressed Securities Risk, Business Development Company Risk, REIT, Mortgage-Related and Asset-Backed Securities Risks, Infrastructure Trust Risk, Income Trust and Master Limited Partnership Risks, Tax Risks, Non-U.S. Securities Risk, Currency Risk, Liquidity Risk, Leverage Risk, Non-Diversification Risk, Inflation/Deflation Risk, Market Discount and Net Asset Value Risk, Market Disruption Risk, Certain Affiliations, and Anti-Takeover Provisions.

Financial Sector Concentration Risk: Under normal market conditions, the Fund will invest at least 25% of its total assets in securities of companies within industries in the financial sector. A fund concentrated in a single industry or group of industries is likely to present more risks than a fund that is broadly diversified over several industries or groups of industries. Compared to the broad market, an individual sector may be more strongly affected by changes in the economic climate, broad market shifts, moves in a particular dominant stock, or regulatory changes. Specialty Finance and other financial companies in general are subject to extensive government regulation, which may change frequently. The profitability of specialty finance and other financial companies is largely dependent upon the availability and cost of capital funds, and may fluctuate significantly in response to changes in interest rates, as well as changes in general economic conditions. From time to time, severe competition may also affect the profitability of specialty finance and other financial companies. Financial companies can be highly dependent upon access to capital markets and any impediments to such access, such as general economic conditions or a negative perception in the capital markets of a company's financial condition or prospects could adversely affect its business. Leasing companies can be negatively impacted by changes in tax laws which affect the types of transactions in which such companies engage.

REIT, Mortgage-Related and Asset-Backed Securities Risks: Investing in REITs involves certain unique risks in addition to investing in the real estate industry in general. REITs are subject to interest rate risks (especially Mortgage REITs) and the risk of default by lessees or borrowers. An Equity REIT may be affected by changes in the value of the underlying properties owned by the REIT. A Mortgage REIT may be affected by the ability of the issuers of its portfolio mortgages to repay their obligations. REITs whose underlying assets are concentrated in properties used by a particular industry are also subject to risks associated with such industry. REITs may have limited financial resources, their securities may trade less frequently and in a limited volume, and their securities may be subject to more abrupt or erratic price movements than larger company securities. In addition to REITs, the Fund may invest in a variety of other mortgage-related securities, including commercial mortgage securities and other mortgage-backed instruments. Rising interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in interest rates, and may reduce the market value of the securities. In addition, mortgage-related securities are subject to prepayment risk-the risk that borrowers may pay off their mortgages sooner than expected, particularly when interest rates decline. This can reduce the Fund's returns because the Fund may have to reinvest that money at lower prevailing interest rates. The Fund's investments in other asset-backed securities are subject to risks similar to those associated with mortgage-backed securities, as well as additional risks associated with the nature of the assets and the servicing of those assets.

The risks of investing in the Fund are spelled out in the prospectus, shareholder report and other regulatory filings.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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